[Italy's Prime minister Matteo Renzi and Tsipras seemed to be easy-going and in a good mood already on Monday evening when they appeared before the press in Rome. "We speak the same language," assured Tsipras.
Renzi made two thing clear. First, that Italy is also a creditor of Greece; and, second, the two "had not spoken about technical solutions." But then he added that precisely as a creditor, Italy has no interest "in strangling the debtor." And Italy wants finally after months "to bring Europe to the point where we talk more about growth." He said that was "not an easy battle["], but "something has started to move in Europe."

Renzi's message was clear. "Despite all the difference of opinion over details," he also sees Tsipras as an ally who "we must hep, even when he's not always right." In the end, the two 40-year-olds "are united by the idea on once again giving politics the possibility to change things and to draw the young generation back closer to the state." Renzi also allowed himself one more bonmot: "I spent my first year as Prime Minister being accused of being a radical leftist in Europe and in Italy a dangerous rightist. For me it's a real blessing that Tsipras is now on stage!"]

Deficit hawks started preaching long-term austerity, and we’ve seen the awful consequences ever since. People have suffered terrible hardship and dislocation, with countries such as Greece and Spain reaching rates of unemployment worse that what happened in the United States in depth of the Great Depression. You’d be hard-pressed to find examples of such a severe collapse historically, with the possible exception of certain Latin American countries, such as Argentina in 2001. Those who predicted that that this austerity policy would eventually lead to an economic turnaround because of the belief in private sector rebound obviously got it wrong. After five years of negative economic growth, the Greek electorate — with incredible courage — told the so-called Troika that they had had enough, especially with these deep cuts in wages, employment, and pension transfers. ...

the experience of the 1930s, which is being repeated with such vengeance in the Eurozone since 2010, is that pursuing austerity policies alone without some other outside stimulus, say, from increased net exports, can’t lead to balanced budgets. Instead, it leads to disaster. These policies destabilize the private sector to such an extent that they actually jeopardize chances of any future recovery. Many Greek citizens felt that they had reached this threshold and wanted a reversal of policy. [my emphasis]

He also discusses one idea in play as a possible tool for Greece in the near future, a parallel currency:

A lot depends on how big the European Central Bank is willing to go with its plans. If the action was bold enough, Greek banks could benefit indirectly and it could give the Greek government some breathing room and prevent a default, assuming its current creditors demand payment. In the medium term, Greece could create some form of parallel currency set at par with the euro, like Argentina did in the early 2000s. The government in Argentina used “patacones” to buy things and pay employees and they became quite acceptable because ultimately regular people could pay taxes with this currency. The Greeks could have a parallel national currency without altogether abandoning the euro.

Beatriz Talegón writes about related political development in Spain, Un cambio en marchaEl Plural 02.02.2015. Talegón is a left-leaning activist of the social-democratic PSOE and head of a group called the Foro Ético. In this piece she talks about how the new Podemos party is attracting support from former PSOE voters disillusioned with the PSOE's capitulation to neoliberal austerity policies. She's very interested in seeing the PSOE make a turn toward cooperating on policy with Podemos instead of capitulating to the neoliberal policies of the current conservative government headed by the Partido Popular (PP).

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